Maybe the good old days are now

Economics forcing big business to take more control of healthcare delivery

Many healthcare providers in the U.S. are going through a rough financial patch right now. Reports of lower earnings, layoffs, bankruptcies and closures are commonplace. Adding to providers stress level is the growing oversight and compliance burden from such things as never event payment policies, Medicares Recovery Audit Contractor program and myriad quality-reporting demands. But after you retire, youll remember these years as the good times.

Last week, I attended the annual conference of the National Business Coalition on Health in Washington, and I saw the future. Its a future in which the business community dictates how the healthcare delivery system will operate because big business will decide what it will and will not pay for. The business community will make those decisions based on its financial needs. What it needs financially is a healthy, productive (read: low cost) workforcenow, to cope with the current economic downturn, and in the future, to compete in the growing global economy.

Business coalitions burst onto the scene years ago, all dedicated to helping their employer members control their healthcare costs. But they didnt live up to that promise. Rather than working with local hospitals and doctors to provide better value to them in terms of what outcomes they got in exchange for what they paid, they took the easy route. Employers dropped first-dollar coverage; they cut back on traditional indemnity coverage; they pushed employees into restrictive managed-care plans; they shifted premium dollars to workers; they forced employees into high-deductible plans; or they dropped coverage all together. They did everything except get serious about controlling their healthcare costs by creating a healthier workforce.

But the vibe I picked up from the NBCH meeting was different. It was serious. The more than 500 business coalition executives, business leaders and other attendees were dead serious about lowering their operating costs and boosting efficiency by improving employee health status. As John Castellani, president of the Business Roundtable, noted during his keynote address at the conference: If the business community doesnt take action now, someone else will. And that someone likely will be the government, an option that Castellani said will stifle innovation.

Anticipating this shift in the business community, we launched our Healthcare Purchasing Power Survey, which debuted in the Nov. 10 issue (p. 24). Its also why were doing a series on the efficacy of employer wellness programs (See story, p. 34).

Topping employers list of innovations is a value-based benefits package that provides financial incentives to employees to do things like stop smoking, eat right and exercise, and better manage any chronic medical conditions they have so they can avoid expensive doctor or hospital visits. You need to look no further than the conference brochure to discover who the business community has partnered with on the effort: the pharmaceutical industry. All the big names were there either with exhibit booths, sponsoring a specific education track or attaching their name to one NBCH award or another. Employers pay employees to use drugs to stay or get healthy and avoid costly medical care, and drugmakers are willing to help and cash in.

Thats all good for employers, employees and drug companies. But its not so good for hospitals, physicians and other providers who depend on patient volume to stay in business and make a living. The successful providers in the future will have to figure out a way to make money by keeping people healthy rather than treating them when theyre sick. For many providers reluctant to change, these are the good old days when you could get paidalbeit cheaply, slowly and only after complying with complex reporting and billing rulesfor taking care of someone.